Nuts

Walnuts: China needs to adjust

March 15, 2023 at 11:27 AM , Der AUDITOR
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REUS/SACRAMENTO. Global walnut production is 16% up according to the recent International Nut and Dried Fruit Council (INC) estimates. Issue is that speculations over China’s bumper crop have turned out to be true. US export to Europe have, however, declined sharply.

 

Prices too high in China

The INC estimates global in-shell production at 2.6 million mt with China accounting for more than 50%. China has, in fact, stepped up production by 27% in 2022/2023 as final crop receipts are in line with initial expectations of 1.4 million mt. Trouble, however, is that the local market still has to adjust to this large volume. Farmgate prices are not low enough for suppliers to compete internationally and packers have switched to local customers. Exports from China have slumped by 30-40% this season so far. Yet, given that the country has abandoned its zero-Covid policy, the currency is gaining and sea freight is lower consumption and exports should recover in the next few months. China will, nevertheless, end the season with stock 50% up on last year at 95,000 mt.

US in-shell ending stocks should, by contrast, drop from 125,000 mt in 2021/2022 to 75,000 mt. Production ranged only 2.4% higher in 2022/2023 at 678,000 mt and the hot temperatures witnessed before the harvest caused around 80,000-100,000 mt of walnut kernels to be light amber or darker. Expectation is that these volumes will be turned into animal feed or oil and bought up by the USDA nutritional assistance programme. Chile has also stepped up production by 11% this season and more good news is in store as production should rise to 191,000 mt according to Chilenut’s preliminary forecast. Global ending stocks will range a bit lower this season at 185,750 mt as opposed to the 187,370 mt registered in 2021/2022.

Global walnut production (mt), in-shell basis

Country

2021/22

2022/23

Diff.

China

1,100,000

1,400,000

27.3%

USA

662,000

678,000

2.4%

Chile

153,760

171,500

11.5%

Ukraine

85,000

78,000

-8.3%

Turkey

37,200

48,000

29%

Iran

31,000

46,500

50.0%

France

37,000

39,000

5.4%

Romania

28,000

30,000

7.1%

India

37,000

31,000

-12.3%

Argentina

21,500

22,500

4.6%

Italy

15,850

19,500

23.0%

Moldova

18,000

17,800

-1.2%

Hungary

13,500

13,500

0%

Australia

12,500

13,500

8.0%

Georgia

7,100

8,200

15.5%

Others

15,000

16,500

10.0%

Total

2,274,410

2,632,000

15.7%

China Chamber of Commerce for Import and Export of Foodstuffs, California Walnut Board and Commission, Chilenuts and other INC source, INC March 2023

US exports 6% down

US monthly shelled walnut exports declined by 14% to 29 million pounds as compared with the 33 million pounds shipped overseas in February last year. Total exports for the season range 6% lower at 115 million pounds as sharp declines have been observed in shipments to Germany, which nevertheless remains the most important export destination, Japan and Israel. Shipments to South Korea and Spain are also down. By contrast, shipments to Jordan have more than tripled and shipments to the UK are more than 50% up. Since domestic shipments have climbed by 15% the grand total ranges a bit higher than last year at 225.631 million pounds.

US walnut shipments, shelled, in 1,000 pounds

Destination

2021/22

2022/23

Diff.

USA

100,287

115,517

15.2%

Germany

36,926

29,207

-20.9%

Korea

16,225

14,797

-8.8%

Spain

16,079

14,738

-8.3%

Japan

25,511

14,224

-44.2%

Netherlands

9,234

9,440

2.24%

Canada

8,006

9,318

16.4%

Jordan

2,041

7,105

248.2%

UK

3,759

5,924

57.6%

Israel

7,006

5,361

-23.5%

Others

225,074

225,631

0.2%

Grand Total

252,197

258,705

2.6%

Domestic Total

100,287

115,517

15.2%

Export Total

151,910

143,188

-5.74%

California Walnut Board, Monthly Shipment Report February 2023
01/09-28/02

Price drops in Europe

Walnut kernel prices for Chilean and US varietes have come down in Europe. Kernels from Moldova are, however, trading firm. As supplies of light half pieces in good quality are becoming more limited in the USA prices should, however, start to rise for US varieties.

Walnuts

Type, origin

EUR/kg

USD/kg

White quarters/pieces, Moldova

4.75

5.07

Chandler halves, 80%, USA

6,10

6.51

Chandler halves/LHP, 40% USA

4.65

4.96

Light quarters, 80%, China

4.35

4.64

Extra light halves, 40%, Chile

5.70

6.09

Extra light halves, 60%, Chile

6,15

6.57

FCA Spain

 

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